Debt by State 10-10-25

As of October 2025, definitive state debt rankings are not yet available, as fiscal reports for the full 2025 period have not been released. The most current comprehensive analyses are based on earlier fiscal years, often 2022 or 2024, and provide insight into overall liabilities rather than a simple measure of "state debt".  

For example, a state like California may have the highest overall liabilities by raw dollar amount, but a state like Connecticut or New Jersey may have a higher debt burden on a per-capita basis due to unfunded pension and other liabilities. For this reason, state debt is typically ranked in several ways. 

Rankings by total liabilities

The Reason Foundation's analysis of fiscal year 2022 data reported the states with the highest total liabilities: 

·       California: $498 billion

·       Illinois: $247 billion

·       New York: $245 billion

·       New Jersey: $225 billion

·       Texas: $221 billion 

Rankings by per-capita liabilities

Based on fiscal year 2022 data, Reason Foundation identified the following states with the highest total liabilities per capita: 

·       Connecticut: $27,031

·       New Jersey: $24,200

·       Hawaii: $19,400

·       Illinois: $19,400

·       Wyoming: $18,600 

Rankings by unfunded pension debt

When looking specifically at unfunded pension liabilities at the end of fiscal year 2022, Illinois leads the nation: 

·       Illinois: $139.8 billion

·       New Jersey: $75.1 billion

·       California: $54.2 billion

·       Connecticut: $36.1 billion

·       Massachusetts: $34.8 billion 

Fiscal stability outlook for 2025

·       The independent watchdog group Truth in Accounting released its "Financial State of the States 2025" report, which ranks the states based on their financial condition. The full report can be accessed online, but the group previously named North Dakota, Alaska, and Wyoming as states with the best financial standing.

·       While the 2025 report does not yet offer a complete picture, a February 2025 MultiState analysis identified several states facing significant budget challenges for their 2025 fiscal year, including Colorado, Illinois, Maryland, New Jersey, New York, Pennsylvania, and Washington.

·       At the end of the 2024 fiscal year, Truth in Accounting found that states had a total of $765 billion in unfunded debt when offsetting liabilities against available assets. Unfunded retirement obligations, including pensions and OPEB (Other Post-Employment Benefits) liabilities, were the largest contributors. 

Comments

There is a case to be made to reduce Federal Funding of States, starting with non-essential projects like Bike-Lanes, 12 foot Multi-Use paths, Greenspace, Roundabouts and memorials. These should be proposed as City and County projects and paid for by having the local voters vote to fund them.

High State Debt Financing creates unnecessary Interest costs. Using Bonds to finance projects double the cost of the Projects.

Norb Leahy, Dunwoody GA Tea Party Leader